Wednesday, April 04, 2007

"Famous Marks" Doctrine Not Found in Federal Law, Says 2nd Circuit

In a case involving the mark BUKHARA for restaurant services, the United States Court of Appeals for the Second Circuit has concluded that the Lanham Act cannot be read to include a "famous marks" exception. The Court certified to the New York State Court of Appeals the question of whether New York common law recognizes the doctrine. ITC Limited v. Punchgini, Inc., 482 F.3d 135 (2nd Cir. 2007).

BUKHARA: New Delhi, India

Under the "famous marks" doctrine, a mark is protected in a given nation if it is well known in that nation even though the mark is neither used nor registered there. The appellate court's opinion includes an informative review of the history of the doctrine and the federal case law relating thereto.

The district court had awarded summary judgment to defendants on all counts: trademark infringement and unfair competition under federal and state law, and false advertising under federal law. The Second Circuit affirmed the district court's ruling on all counts except for the state unfair competition law claim.

The trademark infringement claims failed because ITC abandoned its BUKHARA mark in the United States. ITC's federal registration was ordered to be cancelled.

As to the unfair competition claims, the appellate court first looked at the federal claim under Section 43(a) of the Lanham Act. Plaintiff ITC, because its U.S. rights had been abandoned, was left to invoke the "famous marks" doctrine, arguing that the BUKHARA mark was "renowned" in the United States before the Defendants opened their first restaurant.

The appellate court reviewed the "territoriality" principle basic to American trademark law, and the history of the "famous marks" doctrine as an exception to that principle. Included was a review of three TTAB relevant rulings, including the recent First Niagara decision in which the Board "reiterated in dicta that owners of well known foreign marks need not use those marks in the United States to challenge the registration of marks likely to promote confusion on the part of consumers."

The court recognized that TTAB decisions, while not binding, are "to be accorded great weight." However, the court expressed a "significant concern" with the three TTAB rulings: "nowhere in the three cited rulings does the Trademark Board state that its recognition of the famous marks doctrine derives from any provision of the Lanham Act or other federal law." The TTAB's "reliance on state law to recognize the famous marks doctrine falls outside the sphere to which [the court] owe[s] deference."

As the federal courts, the Ninth Circuit is the only federal appeals court to recognize the famous marks doctrine as a matter of federal law, in the Grupo Gigante case. However, that decision "did not reference either the language of the Lanham Act nor Article 6bis of the Paris Convention so support recognition of the famous marks doctrine." District courts have reached varying conclusions about the applicability of the famous marks doctrine to Lanham Act claims.

As to various treaties and implementing legislation, the court was unable to find a "clear congressional intent to incorporate a famous marks exception in federal unfair competition law." "Before we construe the Lanham Act to include such a significant departure from the principle of territoriality, we will wait for Congress to express its intent more clearly."

Defendants' BUKHARA GRILL: New York City

Turning to the state unfair competition claim, the court was unable to find authoritative law on the issue of whether New York's common law recognizes the famous marks doctrine. Consequently, the court certified two questions to the New York Court of Appeals: (1) Does New York Recognize the Famous Marks Doctrine? and (2) How Famous Must a Mark Be to Come Within the Famous Marks Doctrine?

Finally, as to the false advertising claims, the court found that ITC lacked standing because it failed to adduce evidence of "a reasonable basis" for it to think that defendants' actions would damage its interests.

In sum, the appellate court affirmed in part and reversed in part pending the response of the New York Court of Appeals to its Certified Questions.

TTABlog note: There now appears to be a split between the Second and Ninth Circuits on the availability of the "famous marks" doctrine in federal trademark cases. Call for the Court! the Supreme Court! Will the Supreme Court please pick up the white courtesy phone?

Text Copyright John L. Welch 2007.


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